Deputy Prime Minister and Minister for Finance Bishnu Prasad Paudel has defended the government's decision to impose a luxury tax on gold and silver, stating that the measure is aimed at helping Nepal exit the grey list of the Financial Action Task Force (FATF).
Responding to questions raised during deliberations on the Appropriation Bill for Fiscal Year 2025/26 in the National Assembly on Wednesday, Minister Paudel said the luxury tax is intended to enhance transparency in the trading of gold and silver.
"Currently, a two percent luxury tax is levied on gold transactions exceeding Rs 1 million. In the budget for the upcoming fiscal year, this threshold has been removed," he said.
Acknowledging concerns expressed by gold and silver dealers over the new tax provision, the Finance Minister said the government is in discussions with stakeholders and expressed hope for a positive resolution.
Paudel also defended the overall budget of Rs 1964 billion presented last month, describing it as realistic and implementable. He said the budget is based on a thorough analysis of internal revenue generation, loans, and grants, and emphasized that borrowing will be used primarily for capital formation.
"We are mindful that the level of debt should not exceed the limit. Our focus remains on investments that enhance production and productivity," he said.
Rejecting suggestions of undue political influence in the budget formulation process, Minister Paudel said the fiscal plan prioritizes the acceleration of national pride projects, increased civic involvement in production, employment and social security, and the promotion of entrepreneurship.
He also claimed there had been broad participation of lawmakers in the budget drafting process.
Later in the meeting, the National Assembly approved a proposal tabled by Finance Minister Paudel to consider the Finance Bill, 2082 and the Bill to Raise National Debt, 2082 . -- RSS
